It has been Medicare’s standard operating procedure that patients will be discontinued from therapy services if they are not improving or have plateaued. However, due to a settlement in a class action lawsuit filed in 2011 against the secretary of health and human services, Medicare will now pay for physical therapy, nursing care and other services for beneficiaries with chronic diseases like multiple sclerosis, Parkinson’s or Alzheimer’s disease in order to maintain their condition and prevent deterioration.

Medicare officials have updated the agency’s policy manual to remove the concept that improvement is necessary to receive coverage for skilled care. Though, don’t expect an announcement from Medicare about the new policy. Medicare officials were only required to inform health care providers, bill processors, auditors, Medicare Advantage plans, the 800-MEDICARE information line and appeals judges — but not the actual beneficiaries.

The settlement also affects home health care and nursing home care, for patients in both traditional Medicare and private Medicare Advantage plans. It allows people to remain somewhat independent and healthier for a longer time.

Coverage can still be lost for reasons other than a lack of improvement. For nursing home coverage, you must have a doctor’s order prescribing skilled nursing home care (not custodial care), and you must have spent three consecutive midnights in the hospital as an admitted patient. Limits on the duration of Medicare nursing home coverage remain the same.